q4 2016 presentation - napatech · 32% increase compared to q4 2015 86% increase compared to q3...

1Napatech A/S Copyright 2016

Napatech A/S Copyright 2016

February 14th, 2017 – Henrik Brill Jensen, CEO

Q4 2016 PRESENTATION


Financial Highlights Q4 2016

2016 – full year

Revenue 234.7 MDKK 8% growth

EBITDA margin 19%

USD sales in Q4 2016 was 13.3 MUSD

27% increase compared to Q4 2015

Revenue in Q4 2016 was 92.3 MDKK



Gross margin in Q4 2016 was 66%

Compared to 73% for Q4 2015

EBITDA in Q4 2016 was 28.0 MDKK

11.7 MDKK increase compared to Q4 2015

30% EBITDA margin in Q4 2016

EBIT in Q4 2016 was 17.7 MDKK

Increase from 7.5 MDKK in Q4 2015

EPS in Q4 2016 was 0.56 DKK

Increase from 0.22 DKK in Q4 2015

Cash and cash equivalents at 47.0 MDKK

Decrease of 1.0 MDKK compared to Q3 2016

Net cash at 41.6 MDKK by end of Q4 2016


Q4’16 Q3’16 Q4’15

Revenue (MDKK) 92.3 49.6 69.9

Growth YoY* 32% (18%) 44%

Gross Margin 66% 71% 73%

EBITDA (MDKK) 28.0 6.1 16.3

EBT (MDKK) 17.7 (3.0) 7.5

Cash flow from operating activities (MDKK) 5.7 10.0 31.1

Cash and cash equivalents, end of quarter (MDKK)** 47.0 48.0 75.9

* YoY is the growth of current quarter compared with the same quarter one year earlier** Trade receivables increased by 29 MDKK YoY driven by end of year growth

Financial Results Q4 2016


Influencing factors:

The growth is primarily driven by

our Pandion business and recent

Accelerator design wins

Currency, revenue recognition and

accounting adjustments have some

effect as we have seen the USD

exchange rate increase towards the

end of the period

Note: The US Dollar to Danish Kroner

exchange rate is calculated as a daily

average rate trough the quarter and

compared YoY

Q4 2016 Revenue

Sales / Revenue Growth (YoY)

0%

5%

10%

15%

20%

25%

30%

35%

Sales in USD FX tailwind* Adjustments Reported revenue

* Based on average rates


Gross margin development:

The gross margin in Q4’16 is at 66%,

which brings the overall gross margin

for 2016 to the expected level of 70%

The gross margin in Q4’16 is affected

by changes in the product-mix and

enhanced Pandion sale

Gross Margin Development

Gross Margin

60%

65%

70%

75%

80%

2011 2012 2013 2014 2015 2016


Q4 2016 EBITDA margin:

EBITDA margin is higher in Q4

compared to last year, this underlines

the high scalability in Napatech’s

business, has higher revenue drives

the EBITDA margin up

EBITDA Margin

0%

5%

10%

15%

20%

25%

30%

35%

Q1 Q2 Q3 Q4

2015 2016

EBITDA Margin


Geographical split:

North America showed a growth of

25% compared with Q4 2015, related

to a couple of large OEM customers

EMEA showed a significant growth of

143% driven by ramp up of design

wins secured in 2016, and one-off

projects

APAC showed a decline of 48% due to

timing of the projects in the regions

sale.

Growth in NAM and EMEA

Quarterly Revenue in MDKK

-

10

20

30

40

50

60

70

NAM EMEA APAC

Q4'15 Q4'16


2016 Key Financial Focus AreasFull year compared to 2016 target & 2015

Our focus areas Target Comment 2016 Target2016 Full Yearcompared to

2015

Revenue Delivered to guidance 5 - 15% growth 8% growth

Gross Margin Influenced by new product line(s) and go to market strategy ~ 70% 70%

Overall Costs Improved overall profitability by sustained scalability 5% increase 0% increase

EBITDA Margin Delivered to guidance ~ 20% 19%

R&D Investments Product developed to support the strategy > 40 MDKK 46 MDKK

Net Cash Position Investments as planed, increased trade receivables +/- 10 MDKK - 28 MDKK



This is Napatech


Key Internet Trends fueling our BusinessFundamental Needs of Users

Increasing internet

dependence

Stay connected

Exploding volumes of

data

Highernetwork speeds

Services moving to the cloud

More sophisticated services and

usageBe secure


Enabling Connectivity and SecurityFundamental to our Internet Dependence

Cybersecurity Applications ensuring

users be secure

Network Management Applications ensuring users stay connected

Users Services

NapatechSmarter Data

Delivery


Smarter Data Delivery at a GlanceThe Data Journey

Click on Picture to start Video

https://www.youtube.com/embed/u5k9Uetzfy4


Smarter Data DeliveryTargeting High-Value, Hi-Need Industries

Data for assuring a reliable and secure mobile connectivity

experience

Data forensuring efficient,

secure and compliant financial transactions

Data for ensuring the accessibility and

security of cloud services

Data for systems securing people and

critical national infrastructure

TelecomOperators

Cloud andData Center

FinancialServices

Infrastructure and Defence


Smarter data. Delivered.our Strategic Ambition

Our ambition is to be the #1 vendor for Smarter Data Delivery Solutions – providing a 100 MUSD top-line by 2020

Our strategy is powered by major global trends within Mobile, Cyber Security, Virtualization and IOT, as well as continuous enhancement of network connectivity towards Terabit speeds

Our strategy is to secure success, through close collaboration with selected market-leading and innovative customers byco-creating new solutions, products and value-adding services

Our strategy is based on a strong product portfolio powered by leading-edge core technology and global internet trends fueling the need for guaranteed connectivity and security

RECORDER

SOLUTIONS

VIRTUALIZED

NETWORKS

ACCELERATOR

SOLUTIONS



Business Highlights


Design-win effect on Q4 RevenueStrong Performance by recent Design Wins

Q4 2016 delivered a record high revenue, coming from both Accelerators

and Pandion product lines – recent design wins and new customers

contributed significantly to the growth

The Pandion business delivered the following growth

12% of the overall revenue in Q4 build on design-wins secured in 2016

Remember that this product line had no revenue in 2015.

The Accelerator business delivered the following growth

8% of the overall Q4 revenue build on design-wins secured in 2016

28% of the overall Q4 revenue build on design-wins secured in 2015

A major part of the growth is delivered by a OEM customer catching

up on their roll-out


Recent Design Wins

10 Gigabit design win with European based network security company

for a Public Infrastructure and Defense solution

10 Gigabit design win for a Tier 1 North American test & measurement

equipment manufacturer for a Telecommunication solution

40 Gigabit design for a North American Federal customer

for a Public Infrastructure and Defense solution



Business Outlook


Guidance for 2017:

Revenue growth of 10% - 20%

Gross margin around 68%

EBITDA margin around 20%

Management Outlook 2017

Napatech´s strategy is to be the #1 vendor of Smarter Data Delivery

Solutions, based on market expansion, product line investment and

strong Tier 1 customer penetration

Based on the growth of 8% in 2016, the company expects the profitable

revenue growth to continue in 2017, across the business areas

Napatech is comfortable with an accelerated growth path towards the

ambition of 100 MUSD top-line by 2020

Short term visibility is limited and will be affected by quarter-to-quarter

order fluctuations and general uncertainty


Save the Date: Capital Market Day in Oslo on April 5’th, 2017

Want to learn more? About Napatech, Smarter Data

Delivery, Virtualization, IOT, 100 Gigabit …. and other trends in the industry

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Important NoticeThis presentation includes and is based, inter alia, on

forward-looking information and statements that are

subject to risks and uncertainties that could cause

actual results to differ. These statements and this

presentation are based on current expectations,

estimates and projections about global economic

conditions, the economic conditions of the regions and

industries that are major markets for Napatech A/S

(including subsidiaries and affiliates) lines of business.

These expectations, estimates and projections are

generally identifiable by statements containing words

such as ”expects”, ”believes”, ”estimates” or similar

expressions. Important factors that could cause actual

results to differ materially from those expectations

include, among others, economic and market

conditions in the geographic areas and industries that

are or will be major markets for Napatech A/S’

businesses, energy prices, market acceptance of new

products and services, changes in governmental

regulations, interest rates, fluctuations in currency

exchange rates and such other factors as may be

discussed from time to time in the presentation.

Although Napatech A/S believes that its expectations

and the presentation are based upon reasonable

assumptions, it can give no assurance that those

expectations will be achieved or that the actual results

will be as set out in the presentation. Napatech A/S is

making no representation or warranty, expressed or

implied, as to the accuracy, reliability or completeness

of the presentation, and neither Napatech A/S nor any

of its directors, officers or employees will have any

liability to you or any other persons resulting from your

use.

This presentation was prepared for fourth quarter 2016

results presentations. Information contained within will

not be updated. The following slides should be read and

considered in connection with the information given

orally during the presentation.

Napatech A/S’ shares have not been registered under

the U.S. Securities Act of 1933, as amended (the "Act"),

and may not be offered or sold in the United States

absent registration or an applicable exemption from the

registration requirements of the Act.



Thank you

q4 2016 presentation - napatech · 32% increase compared to q4 2015 86% increase compared to q3...

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